Today's construction industry is in an interesting spot, to say the least. Projects are piling up, but so are delays. Backlogs are growing, yet confidence in future sales is dipping. It's a market that’s seeing momentum—and mixed signals.
Data from the Associated Builders and Contractors shows that its Construction Backlog Indicator rose to a 20-month high of 8.7 months in April 2025—up 0.3 months from the previous year.
However, growth isn't without disruption. Material price volatility due to inflation and tariff uncertainty and shifting demand continue to challenge project timelines and profitability.
According to ABC Chief Economist Anirban Basu, "Nearly 22% of contractors had a project delayed or canceled in April due to tariffs, up from 18% in March, while 87% have been notified of tariff-related materials prices increases."
He continues, "Contractors remain busy despite these headwinds; backlog rose in April and is now at the highest level since September 2023. While ABC members remain upbeat about the near-term outlook, the share of respondents that expect their sales to decline over the next six months rose to 19% in April, up 6 percentage points since the start of the year."
If there’s one thing that the above data tells us, it’s that staying busy doesn’t always mean staying profitable. Contractors can no longer afford to bid on and take every opportunity in today's market. You must be selective, strategic, and data-driven in your pursuit of work.
In this article, we'll cover how to choose the right opportunities, including using the right prequalification tools and the key considerations when evaluating owner risk.
Success starts with choosing the right opportunities. This is why the right project qualification systems are a must. With tighter margins and increased owner scrutiny, contractors must prioritize fit, not just volume.
Think of this as the classic quantity vs. quality conversation. It's tempting to want to have both, but with economic uncertainty, contractors who chase volume risk stretching their teams thin and undercutting profitability.
Focusing on margin will serve you a whole lot better than chasing every opportunity that crosses your desk. It leads to:
In the end, having a margin mindset means you're investing your resources where they have the most impact, so you and your team can reap the benefits above.
When you adopt a margin mindset, one of the key steps you must take is to evaluate project risk. Every job has its challenges, but some have red flags you can't afford to ignore.
That's why you should assess risk upfront. Doing so will help protect your margins and ensure you're getting projects that align with your capabilities.
You can look at project risk through different lenses:
New regions = new subs. And new subs = unknown performance. Partnering with fresh subcontractors brings uncertainty, so vetting them properly (and early) can make a huge difference. Consider the following.
Not all owners are created equal. Before committing, take the time to assess how they've worked with other contractors and how they handle payment and project changes.
Material costs and lead times can make or break your margins. Tariffs, shortages, and supply chain disruptions add another layer of risk.
One of the best ways to protect your time and margins when considering projects is to leverage prequalification tools. When used effectively, they help you focus on the right opportunities and avoid costly missteps.
Subcontractor prequal tools enable you to spot risks before they become a reality. They give you a clear picture of the owner, project scope, financials, and trade partners so you can make more confident go/no-go decisions.
With the right tools, you can:
What tools can help you make more informed project decisions? Here are a few worth exploring:
Purpose-built for subcontractor prequalification, TradeTapp helps GCs assess risk and compliance from the start.
Here are some of its standout capabilities:
Sometimes, the most powerful tool is a well-defined internal system. Consider the following when implementing your own prequalification processes:
If you have a CRM like Salesforce or HubSpot (with custom fields and workflows), you can track and use them to qualify projects. Here's some info you can surface through these tools:
This turns anecdotal experience into usable prequal data for future go/no-go decisions.
Adopting a margin mindset and implementing the tools and steps above will help you bid smarter. And when you align with high-margin projects that are a good fit for you, you unlock more sustainable growth.
Being selective with projects enables you to reduce the likelihood of encountering budget blowouts, payment delays, or scope creep. A solid prequalification process filters out red flags early, so your team isn't spending time fixing preventable issues or chasing down change orders.
Choosing the right projects leads to better predictability and profitability. Instead of spreading your resources thin across risky jobs, you're focusing on work that fits your strengths, timeline, and financial goals. This means more consistent cash flow, improved forecasting, and the ability to reinvest in growth.
High-quality projects tend to come with better-aligned partners and clearer expectations. That translates to smoother collaboration, less friction, and happier clients.
Today's construction playing field is much more volatile and high stakes. As such, being selective with projects isn't just strategic—it's essential. By adopting a margin mindset, leveraging structured go/no-go frameworks, and using the right tools, contractors can reduce risk, improve profitability, and build stronger client relationships.
Now's the time to invest in smarter preconstruction practices. Use prequalification tools to vet opportunities more effectively, mitigate risk early, and focus your resources where they matter most.
Want to qualify your subs and partners with more confidence? Try TradeTapp to centralize subcontractor data, automate risk analysis, and streamline collaboration across your estimating and preconstruction teams.
